Resolution 008/2011 Approving the Regulation for the Transport of Monetary Material and/or Securities

BOARD RESOLUTION NO. 008/2011
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES THE REGULATION FOR THE TRANSPORT OF MONETARY MATERIAL AND/OR SECURITIES

HAVING SEEN:
The Political Constitution of the State approved by referendum on January 25, 2009, and promulgated on February 7, 2009.
Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
Law No. 1488 of May 5, 2004 on Banks and Financial Entities and its subsequent modifications.
Law No. 734 of April 8, 1985 Organic Law of the National Police.
The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005 and its subsequent modifications.
The Report from the Financial Entities Management BCB-GEF-SANA-DSP-INF-2010-167 of November 18, 2010.
The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2010-380 of November 19, 2010.

CONSIDERING:
That the Political Constitution of the State establishes in its article 328 that it is the responsibility of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, to regulate the payment system.

That according to article 331 of the Political Constitution of the State, financial intermediation activities, the provision of financial services, and any other activity related to the handling, use, and investment of savings are of public interest and can only be exercised with prior authorization from the State, in accordance with the Law.

That Law No. 1670 provides in its articles 2, 3, and 30 that the BCB's purpose is to procure the stability of the internal purchasing power of the national currency; for this compliance, it formulates policies of general application in monetary and payment system matters, which are subject to its regulatory competence, all entities of financial intermediation and financial services authorized by the Superintendence of Banks and Financial Entities, currently named the Financial System Supervision Authority (ASFI).

That Law No. 1488 in its articles 4 and 154, paragraphs 4 and 6, determines that financial intermediation activities and auxiliary financial services will be carried out by financial entities authorized by the ASFI, an Institution that has among its attributions, among others, to supervise natural or legal persons who carry out auxiliary activities of financial intermediation, as well as to incorporate into its scope of competence, in accordance with the BCB, other persons or entities that carry out financial intermediation activities.

That by virtue of what is established in article 136 of Law No. 734, private organizations destined to investigation and private security can only be constituted and function with prior authorization from the General Command of the National Police, ratified by resolution of the Ministry of the Interior, currently the Ministry of Government.

That the Financial Entities Management through Report BCB-GEF-SANA-DSP-INF-2010-167 establishes that the transport of monetary material and/or securities by its importance must be carried out within adequate frameworks of security and efficiency, for the timely provision of cash to financial intermediation entities; therefore, it is necessary to establish the requirements, responsibilities, and obligations inherent to the service of transport of monetary material and/or securities.

That according to Report BCB-GAL-SANO-INF-2010-380, the Legal Affairs Management concludes that the proposal for the Regulation for the Transport of Monetary Material and/or Securities is legally procedent, since it does not contravene the current legal framework, being the competence of the BCB Board to consider its approval.

That, the BCB Board in its capacity as the highest authority of the Institution, is responsible for defining its policies, specialized regulatory norms of general application, and internal norms, being empowered to issue norms and adopt general decisions that are necessary for the fulfillment of the functions, competencies, and powers assigned by Law to the Issuer Entity, as established in articles 44 and 54 item o) of Law No. 1670 and articles 9, 11, and 24 of the BCB Statute.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve the Regulation for the Transport of Monetary Material and/or Securities, in its IV Chapters, 11 articles, and a transitional provision, which in the annex, forms an integral part of this Resolution.

Article 2.- This Regulation will enter into force from the date of this Resolution.

Article 3.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, January 18, 2011

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Marcelo Zabalaga Estrada

_________________________ _________________________ Ernesto Yáñez Aguilar Rolando Marín Ibáñez

_________________________ _________________________ Hugo Dorado Araníbar Rafael Boyán Téllez

ANNEX
REGULATION FOR THE TRANSPORT OF MONETARY MATERIAL AND/OR SECURITIES

CHAPTER I
GENERAL PROVISIONS

Article 1. (Object). This Regulation aims to regulate the service of transport of Monetary Material and/or Securities within the scope of the payment system and the national financial system.

Article 2. (Scope). This Regulation applies to: a) financial entities that have a license to operate from the Financial System Supervision Authority (ASFI) or are in the process of adaptation; b) Central Bank of Bolivia (BCB); c) public or private companies that provide the service of transport of Monetary Material and/or Securities in the national territory; and d) own transport services of Monetary Material and/or Securities organized by financial intermediation entities.

Article 3. (Mandatory contracting). Financial entities must contract the services of transport of Monetary Material and/or Securities with companies authorized by the ASFI or, in their case, organize their own service of transport of Monetary Material and/or Securities with the non-objection of the ASFI.

Article 4. (Definitions). For the purposes of the application of this Regulation, the following definitions are established:
a) Contractor. Is the financial entity that contracts the services of transport of Monetary Material and/or Securities. b) Vault Custody of Monetary Material and/or Securities. Protection, safeguarding, and conservation of Monetary Material and/or Securities. c) Financial entity. Legal person authorized to carry out financial intermediation activities or activities in the securities market and/or provide financial services. d) Financial Intermediation Entity with Own Transport Service of Monetary Material and/or Securities (ESP). Financial intermediation entity with a license to operate granted by the ASFI, which organizes its own transport and custody service of Monetary Material and/or Securities to cover exclusively its needs.

e) Monetary Material and/or Securities Transport Company (ETM). Legal person legally constituted, in accordance with the provisions of the Commercial Code and other corresponding legal provisions, with the object of carrying out the transport of Monetary Material and/or Securities and related activities. f) Monetary Material. Banknotes and coins of legal tender. g) Transport of Monetary Material and/or Securities. Is the physical transfer of Monetary Material and/or Securities, from one geographic point to another within the local and national scope. h) Securities. Securities, assets subject to physical transport, and other objects or documents that represent value for the service user.

CHAPTER II
ON ETM AND ESP

Article 5. (License to operate for ETM). To provide services of transport of Monetary Material and/or Securities as an ETM, companies must have a license to operate issued by the ASFI.

Article 6. (Non-objection to ESP). To organize the own transport service of Monetary Material and/or Securities as an ESP, financial intermediation entities must have the non-objection of the ASFI.

CHAPTER III
REQUIREMENTS FOR CONSTITUTION AND OBTAINING OF LICENSE TO OPERATE OR NON-OBJECTION, SERVICES, OBLIGATIONS AND RIGHTS OF ETM AND ESP

Article 7. (Minimum requirements for constitution and obtaining of license or non-objection). The ASFI will determine the requirements for constitution and obtaining of license or non-objection under specific regulation, considering at least the following aspects:
a) Minimum capital amount for ETMs. b) Legal form of organization of ETMs. c) Operational requirements:

• Authorization to operate for the transport of Monetary Material and/or Securities granted by the General Command of the Bolivian Police according to specific regulation, ratified by the Ministry of Government.
• Insurance against risks of the contracted business with a qualified triple A insurance entity and reinsured with a qualified triple A international reinsurer.
• Contingency plans and procedures to guarantee the continuity of the service.
  d) Administrative requirements
• Have an Internal Operations Regulation that includes the description of the transport process of Monetary Material and/or Securities in all its stages, indicating the precise moment in which they begin and end, contingency procedures, rights, obligations, and responsibilities of service users, and procedure for the determination, modification, and dissemination of tariffs for ETMs.

Article 8. (Services).
I. ETMs may provide the following services:
a) Transport of Monetary Material and/or Securities. b) Vault Custody of Monetary Material and/or Securities that due to hours, distances, fortuitous cases, or force majeure, could not be delivered at destination on the day. c) Others related to the authorized activity sector authorized by the ASFI in prior consultation with the BCB.
II. ESPs may only provide the service of transport of Monetary Material and/or Securities to cover exclusively their needs.

Article 9. (Obligations and rights). The ASFI will determine the obligations and rights of ETMs and ESPs in its specific regulation.

CHAPTER IV
SURVEILLANCE AND SUPERVISION ENTITIES

Article 10. (Surveillance). In order to promote a safe and efficient functioning of the service, the Financial Entities Management of the BCB will carry out the following functions:
a) Request statistical information from ETMs and ESPs related to their operations. b) Request from the ASFI periodic reviews of the contingency systems of ETMs and ESPs. c) Others necessary for the safe and efficient functioning of the service provided by ETMs and ESPs. If in the exercise of these tasks the BCB identifies indications of regulatory or operational non-compliance, it will communicate the fact to the ASFI for the corresponding process.

Article 11.- (Supervision).
I. Within the framework of Law No. 1488 on Banks and Financial Entities (Consolidated Text) and based on this Regulation, the ASFI may apply article 4 of said Law or another that it considers adequate, to incorporate ETMs as auxiliary financial service companies into its scope of competence.
II. The ASFI will issue specific regulation for the adaptation, obtaining of license to operate and/or liquidation of ETMs, as well as for the non-objection of ESPs. Likewise, it will carry out supervision and control, applying sanctions when appropriate.

TRANSITIONAL PROVISION
Sole. (Adaptation period). Companies and financial intermediation entities that currently provide the service of transport of Monetary Material and/or Securities to the financial system must adapt to what is established in this Regulation and obtain a license to operate or non-objection within the period defined by the ASFI.